Existing Investors Put Another $1.5 Million Into bit.ly

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Bit.ly, the biggest link shortening service around, just raised another modest $1.5 million in convertible debt from all of its existing investors on a pro rata basis, including betaworks, Jeff Clavier’s SoftTech, Ron Conway, Mitch Kapor, Chris Sacca, Howard Lindzon, and O’Reilly AlphaTech Ventures. The funding amount appeared in a new SEC filing and I confirmed it with betaworks CEO and bit.ly president John Borthwick. “Everybody round the table wanted to put in more money,” he says. “No one wanted to let anyone else in.”

The round was structured as a convertible note because it was faster to do it that way, says Borthwick. He also gave me a quick update on bit.ly. Last month, 2.7 billion short bit.ly links were clicked on, with last week being the biggest ever (744 million short links clicked). As the realtime Web grows, so does bit.ly.

Bit.ly Pro, the branded short links for professional publishers and brands, is also “on fire,” he says. There was so much demand for the product that bit.ly had to close the beta 72 hours after launch. The startup is going through and provisioning the 5,000 companies who signed up in that period. Current bit.ly Pro beta customers include the New York Times (http://nyti.ms), TechCrunch (http://tcrn.ch), ABC, NBC, CBS, MTV, Fox, PBS, Dow Jones, Foursquare, Pepsi, the Gap, the Olympics, and about 100 of the Fortune 500.

The service is still free during the beta period, but bit.ly is working on a dynamic pricing model which will be announced later on.